United States Smokeless Tobacco Company

United States Smokeless Tobacco Company (USSTC, formerly United States Tobacco or UST) is the manufacturer of Copenhagen and Skoal brands chewing tobacco. On January 6, 2009, UST Inc. became a wholly-owned subsidiary of Altria Group, the parent company of cigarette maker Philip Morris. UST Inc. is a holding company for its principal subsidiaries U.S. Smokeless Tobacco Company (USSTC) and Ste. Michelle Wine Estates.[1][2]

Contents

Description

United States Tobacco Company ( "UST" or "USTC") is a subsidiary of UST Inc. United States Tobacco Company is a Delaware corporation. UST Inc. is a holding company which owns 100% of the stock of United States Tobacco Company. [3]Circa 1994, UST had 85% of the spit tobacco market [4] UST Inc. and United States Tobacco Company are being represented by Christovich & Kearney (attorney Charles W. Schmidt III) in the Castano suit [5]

UST's board authorized repurchase of 40 million common shares beginning January 1, 1990 -- as of June, 1990, 36 million common shares had been repurchased under the plan. The board authorized the company to repurchase up to 20 million additional common shares in 6/94 (DJ 6/22/94).

Lawsuits

Sean Marsee v. U.S. Tobacco, 1986

Sean Marsee before being diagnosed with oral cancer, and shortly before his death

Sean Marsee was an Oklahoma teenager and track star. Marsee started using chewing tobacco at age 12, after getting a can of free Copenhagen chewing tobacco at a rodeo. He became a regular user and five years after starting his use, he contracted oral cancer. After a ten month battle with rapidly spreading cancer that started on his tongue, Sean Marsee died at age 19, in 1985. Im 1986, after his death, his mother, Betty Ann Marsee, sued the United States Tobacco Company, seeking $147 million because of the failure of the company to warn consumers about snuff's possible health hazards, despite its knowledge of links between an ingredient in snuff and cancer. She also requested $10 million for pain and suffering, and $58,000 for medical and funeral expenses for her son. In June 1986, an Oklahoma City, Oklahoma jury returned 6-0 verdict for U.S. Tobacco in the Marsee v. U.S. Tobacco case, after six hours of deliberations. The jury found insufficient proof to link 19-year-old Sean Marsee's death from tongue cancer to his use of Copenhagen snuff/chewing tobacco. For more information, see Marsee v. United States Tobacco Co.[6]

Kelly June Hill sued USST on behalf of her son, Bobby Hill, who died of oral cancer in 2003 at age 42. Bobby got addicted to spit tobacco as a child, long before health warning labels were put on the product in 1987. In the course of the case, USST dumped a half million pages of documents on the plaintiffs lawyers. The cache of documents revealed about 50 letters from children who had written to USST saying things like, "Please don't raise the price on Skoal, because I only get $5 allowance, and can't afford the seven cans a week that I need," or "I really like the mint flavor, could you make it in a different cut?" In response, UST sent back letters saying, "Thank you for your comments. We'll consider your suggestions, and here are five free cans of Skoal." Antonio Ponvert, the lawyer for the Plaintiff, cited memos that described the company developing plans to market chewing tobacco to users as young as 15 years old, such as minutes from one meeting in 1972. In another memo, a man roughly Hill's age recalled getting free samples of spit tobacco from a car driven through neighborhoods by a Skoal salesman, the same summer Hill starting chewing as a youth.

Key documents

Most of the following USSTC documents were included on the exhibit list in Hill V. USSTC:

Dipping Snuff and Chewing Tobacco - August 12, 1985, UST Chairman Louis Bantle writes a letter to the editor of TIME magazine saying there is a lack of justification for placing a health warning label on smokeless tobacco.

Hawken Review, transcribed text about marketing spit tobacco to children as young as nine years old, taken from a document that was posted online and that USSTC ordered taken down and destroyed circa 2003

Trial testimony of JACK GERARD ZURAWICK, June 6, 1986, MARSEE v. UNITED STATES TOBACCO CO - Trial testimony of a plaintiff's witness in the Marsee case, a former All-American college baseball player, who stated that he played college baseball at four different colleges and that the players at each school had access to free snuff from US Tobacco. He noted that a request had only to be sent to the company and they would send free snuff to the team. He indicated that the snuff came with no health warnings and that US Tobacco made no effort to ascertain that the players were of legal age.

Moist Development - Internal UST document from 1980 discussing pricing "starter" products lower to encourage trial and hence recruit more new users, and the "graduation process" where users move to stronger and more expensive products.

Nicotine Delivery Report - memo discussing marketing spit tobacco to young males as an alternative to smoking or as a product to use after quitting cigarettes.

Projects/Products

The Lotus Project was UST's effort to develop snuff in a kind of bag similar to a tea bag. The little bags were later produced and called Skoal Bandits. In a memo of a meeting in the office of the president of UST, the target market for Skoal Bandits is people 15 to 35 years old. [7] A UST consumer-marketing representative wrote a report complaining that many retailers had begun to refuse to sell snuff to minors: "A lot of our consumers are under 18 and have been smokeless tobacco users for years and now they are being turned down." [8] Manufacturer of moist snuff, including: Copenhagen; Happy Days; Skoal (Skoal Wintergreen Long Cut, Skoal Long Cut Straight, Skoal Bandit) [9] UST Inc. and United States Tobacco Company have manufactured, advertised and sold Sano cigarettes in the U.S. (Allman complaint).